A Natural Monopoly Exists When

question 179

Multiple Choice

A natural monopoly exists when

• A) diseconomies of scale exist in an industry.
• B) one firm can supply an entire market at a lower average total cost than can two or more firms.
• C) a firm can engage in price discrimination.
• D) the producers in an industry have formed a cartel.
• E) a monopoly firm faces a horizontal demand curve.

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Definitions:

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The concept that an individual's simple presence in a situation can influence the behavior of others without any active engagement.

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